2024 Real Estate Year in Review Nation Wide

The data for 2024 is in, and once again, the housing market has taken many by surprise. As we move into 2025, two major trends have caught my attention.

First, let's talk about affordability. Home prices rose a few more percent nationally by the end of 2024, and mortgage rates have hit their highest point in seven months, now exceeding 7% as we approach January. This means the typical mortgage payment for home buyers is starting 2025 at an unprecedented level of $2,290 for the beginning of the year.

In recent months, the market experienced some sales growth compared to the previous year. However, this growth could be at risk if mortgage rates remain high through the first quarter. Homes are already spending 20% more time on the market compared to last year, underscoring the impact of affordability. The quickest way to address affordability issues is through a shift in interest rates.

The second trend to observe is the potential increase in sellers entering the market in 2025. One of the BIGGEST factors in lack of inventory is many sellers do not want to upgrade to another home and give up an interest rate of 3% when they purchased just a few years ago.

Over the past three years, following the pandemic, the market has seen a scarcity of sellers, with only 60,000 new listings per week compared to 80,000 in previous years. However, there are emerging signs that seller activity may be returning to normal levels.